裕丰昌控股(08631) - 2021 Q3 - 季度财报

Financial Highlights The company experienced a significant decline in revenue and gross margin, resulting in a net loss for the nine months ended December 31, 2020 Key Performance Indicators for the Nine Months Ended December 31, 2020 | Metric | Nine Months 2020 | Nine Months 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | approximately HKD 180.8 million | approximately HKD 299.4 million | -39.6% | | Gross Margin | approximately 1.7% | approximately 3.8% | -2.1 percentage points | | (Loss)/Profit Attributable to Owners of the Company | Loss of approximately HKD 3.0 million | Profit of approximately HKD 4.2 million | -171.4% | - The Board does not recommend the payment of any dividend for the nine months ended December 31, 2020[8] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the income statement, equity changes, and explanatory notes Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group transitioned from profit to loss, with revenue decreasing by 39.6% to HKD 180.8 million and gross profit declining by 72.8% to HKD 3.05 million, resulting in a net loss of HKD 2.99 million Consolidated Statement of Profit or Loss (For the Nine Months Ended December 31) | Item | 2020 ('000 HKD) | 2019 ('000 HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 180,798 | 299,381 | -39.6% | | Gross Profit | 3,053 | 11,245 | -72.8% | | (Loss)/Profit Before Tax | (3,705) | 4,794 | From Profit to Loss | | (Loss)/Profit and Total Comprehensive (Loss)/Income for the Period | (2,986) | 4,221 | From Profit to Loss | | Basic (Loss)/Earnings Per Share (HK cents) | (0.75) | 1.06 | From Profit to Loss | Unaudited Condensed Consolidated Statement of Changes in Equity The Group's total equity decreased from HKD 62.66 million to HKD 59.68 million as of December 31, 2020, primarily due to a HKD 2.99 million loss for the period Summary of Changes in Equity | Item | Amount ('000 HKD) | | :--- | :--- | | As at April 1, 2020 (Audited) | 62,661 | | Loss and Total Comprehensive Loss for the Period | (2,986) | | As at December 31, 2020 (Unaudited) | 59,675 | Notes to the Unaudited Condensed Consolidated Financial Statements The notes detail the company's core business of selling diesel and related products in Hong Kong, with 99.7% of revenue from diesel sales, and confirm no dividend recommendation for the period - The Group is principally engaged in the sale of diesel and related products in Hong Kong[15] Revenue Composition for the Nine Months Ended December 31, 2020 | Revenue Source | Amount ('000 HKD) | % of Total Revenue | | :--- | :--- | :--- | | Diesel Sales | 180,190 | 99.7% | | AdBlue Sales | 333 | 0.2% | | Ancillary Transportation Services | 275 | 0.1% | | Total | 180,798 | 100% | - The Board does not recommend the payment of any dividend for the nine months ended December 31, 2020[44] Management Discussion and Analysis This section provides an overview of the Group's business performance, future outlook, and detailed financial analysis for the reporting period Business Review The Group faced significant challenges due to the COVID-19 pandemic, leading to reduced diesel demand from cross-border transportation and construction, resulting in substantial revenue and profit decline despite competitive pricing - The Group's principal business is the sale of diesel and related products in Hong Kong, primarily to logistics and construction companies[48] - The COVID-19 pandemic led to economic contraction, tightened customs clearance measures between Hong Kong and mainland China, severely impacting cross-border transportation services and reducing diesel demand from the logistics sector[49][50] - Hong Kong government's anti-epidemic measures caused suspension of construction projects, leading to uncertain demand for diesel used in construction machinery[53] - Despite offering competitive prices to maintain sales volume, declining gross margins and increasing operating costs resulted in a net loss for the reporting period[54] Future Prospects The Group will closely monitor the COVID-19 pandemic, prioritize cash flow management, adjust business plans for operational stability, and prepare for business recovery while ensuring employee safety - The Group will closely monitor the development of the COVID-19 pandemic, prioritize cash flow management, integrate resources, and adjust business plans to prepare for business recovery[55] Financial Review The Group's financial performance significantly declined, with total revenue down 39.6% to HKD 180.8 million due to a 41.1% drop in average diesel selling price, leading to a 72.3% gross profit decrease and a net loss of HKD 3.0 million Revenue, Sales Volume and Selling Price For the nine months ended December 31, 2020, Group revenue decreased by 39.6% to HKD 180.8 million, primarily due to a 41.1% drop in average diesel selling price to HKD 2.58 per liter, despite a 2.9% increase in sales volume Changes in Diesel Sales Volume and Selling Price (For the Nine Months) | Metric | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Volume | 69.8 million liters | 67.8 million liters | +2.9% | | Average Selling Price | HKD 2.58/liter | HKD 4.38/liter | -41.1% | Cost of Sales Cost of sales decreased by 38.3% to HKD 177.7 million, aligning with revenue decline, as average unit diesel procurement cost fell by 40.6% in line with market trends - Cost of sales decreased by 38.3% to HKD 177.7 million, consistent with the decline in revenue[69] - The average unit procurement cost of diesel decreased by 40.6% from approximately HKD 4.16 per liter to approximately HKD 2.47 per liter, consistent with market trends[70] Gross Profit and Gross Profit Margin Gross profit significantly decreased by 72.3% to HKD 3.1 million, and gross margin sharply declined from 3.8% to 1.7% due to competitive pricing in a challenging business environment Changes in Gross Profit and Gross Profit Margin (For the Nine Months) | Metric | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | approximately HKD 3.1 million | approximately HKD 11.2 million | -72.3% | | Gross Margin | approximately 1.7% | approximately 3.8% | -2.1 percentage points | Loss for the Period The Group recorded a net loss of approximately HKD 3.0 million for the period, a 171.4% decrease from the prior year's net profit of approximately HKD 4.2 million, due to adverse business conditions and increased operating costs - For the nine months ended December 31, 2020, the Group recorded a net loss of approximately HKD 3.0 million, compared to a net profit of approximately HKD 4.2 million in the prior year, representing a 171.4% decrease[92] Use of Proceeds Of the HKD 34.8 million net proceeds from the January 2019 listing, HKD 25.9 million has been utilized as of December 31, 2020, with the remaining HKD 8.9 million for diesel tank trucks and IT system upgrades expected to be fully deployed by March 31, 2021 Use of Net Proceeds (As at December 31, 2020) | Purpose | Revised Allocation (million HKD) | Actual Use (million HKD) | Unutilized Amount (million HKD) | Expected Full Utilization Time | | :--- | :--- | :--- | :--- | :--- | | Purchase of Diesel Tank Trucks | 15.0 | 11.1 | 3.9 | Before March 31, 2021 | | Manpower Expansion | 1.7 | 1.7 | 0 | N/A | | Upgrade of Information Technology System | 5.0 | 0 | 5.0 | Before March 31, 2021 | | Working Capital | 13.1 | 13.1 | 0 | N/A | | Total | 34.8 | 25.9 | 8.9 | | Other Information This section provides details on directors' and shareholders' interests and the company's adherence to corporate governance principles Interests of Directors and Shareholders As of December 31, 2020, Chairman and Executive Director Mr. Lo Ming Yik held 62.78% of the company's issued share capital through Fully Fort Group Limited, with no other directors or major shareholders having disclosable interests - Company Chairman Mr. Lo Ming Yik holds 62.78% of the company's shares through his wholly-owned company, Fully Fort[116][118] Corporate Governance The company complied with the GEM Listing Rules' Corporate Governance Code during the period, establishing audit, nomination, and remuneration committees with compliant compositions, and the audit committee reviewed the unaudited condensed consolidated financial statements - The company has established an Audit Committee, Nomination Committee, and Remuneration Committee, with compositions compliant with Listing Rules requirements[134][141][147] - The unaudited condensed consolidated financial statements for the quarter have been reviewed by the Audit Committee[135] - The company complied with the provisions of the Corporate Governance Code throughout the reporting period and maintained sufficient public float[154][155]